6 ways to make enterprise IoT cost effective

There’s little question that the internet of things (IoT) holds enormous potential for the enterprise, in everything from asset tracking to compliance.

But enterprise uses of IoT technology are still evolving, and it’s not yet entirely clear which use cases and practices currently make economic and business sense. So, I was thrilled to trade emails recently with Rob Mesirow, a principal at PwC’s Connected Solutions unit, about how to make enterprise IoT implementations as cost effective as possible.

“The IoT isn’t just about technology (hardware, sensors, software, networks, communications, the cloud, analytics, APIs),” Mesirow said, “though tech is obviously essential. It also includes ensuring cybersecurity, managing data governance, upskilling the workforce and creating a receptive workplace culture, building trust in the IoT, developing interoperability, and creating business partnerships and ecosystems—all part of a foundation that’s vital to a successful IoT implementation.”

Yes, that sounds complicated—and a lot of work for a still-hard-to-quantify return. Fortunately, though, Mesirow offered up some tips on how companies can make their IoT implementations as cost effective as possible.

1. Don’t wait for better technology

Mesirow advised against waiting to implement IoT projects until you can deploy emerging technology such as 5G networks. That makes sense, as long as your implementation doesn’t specifically require capabilities available only in the new technology.

2. Start with the basics, and scale up as needed

“Companies need to start with the basics—building one app/task at a time—instead of jumping ahead with enterprise-wide implementations and ecosystems,” Mesirow said.

“There’s no need to start an IoT initiative by tackling a huge, expensive ecosystem. Instead, begin with one manageable use case, and build up and out from there. The IoT can inexpensively automate many everyday tasks to increase effectiveness, employee productivity, and revenue.”

After you pick the low-hanging fruit, it’s time to become more ambitious.

“After getting a few successful pilots established, businesses can then scale up as needed, building on the established foundation of business processes, people experience, and technology,” Mesirow said,

3. Make dumb things smart

Of course, identifying the ripest low-hanging fruit isn’t always easy.

“Companies need to focus on making dumb things smart, deploying infrastructure that’s not going to break the bank, and providing enterprise customers the opportunity to experience what data intelligence can do for their business,” Mesirow said. “Once they do that, things will take off.”

4. Leverage lower-cost networks

“One key to building an IoT inexpensively is to use low-power, low-cost networks (Low-Power Wide-Area Networks (LPWAN)) to provide IoT services, which reduces costs significantly,” Mesirow said.

Naturally, he mentioned that PwC has three separate platforms with some 80 products that hang off those platforms, which he said cost “a fraction of traditional IoT offerings, with security and privacy built in.”

Despite the product pitch, though, Mesirow is right to call out the efficiencies involved in using low-cost, low-power networks instead of more expensive existing cellular.

5. Balance security vs. cost

Companies need to plan their IoT network with costs vs. security in mind, Mesirow said. “Open-source networks will be less expensive, but there may be security concerns,” he said.  

That’s true, of course, but there may be security concerns in any network, not just open-source solutions. Still, Mesirow’s overall point remains valid: Enterprises need to carefully consider all the trade-offs they’re making in their IoT efforts.

6. Account for all the value IoT provides

Finally, Mesirow pointed out that “much of the cost-effectiveness comes from the value the IoT provides,” and its important to consider the return, not just the investment.

“For example,” Mesirow said, the IoT “increases productivity by enabling the remote monitoring and control of business operations. It saves on energy costs by automatically turning off lights and HVAC when spaces are vacant, and predictive maintenance alerts lead to fewer machine repairs. And geolocation can lead to personalized marketing to customer smartphones, which can increase sales to nearby stores.”